Australia's growing bioenergy sector could supply more than half of national LPG demand by 2050 in a best-case bioLPG scenario, energy advisory firm Blunomy said at the Gas Energy Australia forum in Sydney this week.
But output is likely to remain constrained by limited production pathways and ongoing policy uncertainty.
BioLPG is produced as a co-product of several fuel pathways, including alcohol-to-jet (ATJ), hydroprocessed esters and fatty acids (HEFA), and Fischer–Tropsch (FT) processes used to manufacture sustainable aviation fuel (SAF) and renewable diesel (RD). Several SAF and RD projects are under development in Australia — some expected to start before 2030 — and early modelling from Blunomy outlines the potential scale of bioLPG output across these pathways.
In a best case scenario assuming full capture of bioLPG, production would reach about 24,000 t/yr by 2030, rising to around 257,000 t/yr by 2040 and roughly 300,000 t/yr by 2050, meeting about 52pc of projected LPG demand, a Blunomy representative said. Closing the remaining 48pc gap would require dedicated renewable liquid gas (rLG) pathways, including power-to-liquids technologies designed specifically for LPG output. Expanding Australia's bioenergy mix to include co-processing, biogas-to-LPG, residue-to-dimethyl ether (DME) pathways will also be critical, the firm said.
Cost remains another key constraint. A 400,000 t/yr HEFA plant could produce around 20,000 t/yr of biopropane, 5pc of capacity, but refining and handling the gas requires complex and capital intensive distillation, refrigeration and logistics, a representative from Australian bioenergy producer Jet Zero said. As a result, commercial viability will depend on securing offtake agreements and stronger support from both government and industry to scale production and reduce costs, the firm said.
Limited policy support for primary fuels — SAF and RD — has left comparatively little focus on bioLPG as a co-product. But some progress has been made this week. Australia's government-backed GreenPower scheme will launch a low carbon liquid fuels (LCLF) certification programme in 2028, covering SAF, RD, biodiesel and bioLPG. The scheme, first announced in August last year, held stakeholder consultation earlier in 2026 and will develop certification frameworks in 2027. It will be based on a book and claim model with tradeable certificates, while demand-side support and mandates remain under consideration.
